381 F.3d 6 (1st Cir. 2004), 03-2143, American Cyanamid Co. v. Capuano

Docket Nº:03-2143.
Citation:381 F.3d 6
Party Name:AMERICAN CYANAMID COMPANY, Plaintiff, Rohm And Haas Company, Plaintiff, Appellee, v. Daniel J. CAPUANO, Jr.; Jack Capuano; United Sanitation, Inc., Defendants, Appellants, A. Capuano Bros., Inc.; Capuano Enterprises, Inc., Defendants.
Case Date:August 18, 2004
Court:United States Courts of Appeals, Court of Appeals for the First Circuit

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381 F.3d 6 (1st Cir. 2004)

AMERICAN CYANAMID COMPANY, Plaintiff, Rohm And Haas Company, Plaintiff, Appellee,


Daniel J. CAPUANO, Jr.; Jack Capuano; United Sanitation, Inc., Defendants, Appellants,

A. Capuano Bros., Inc.; Capuano Enterprises, Inc., Defendants.

No. 03-2143.

United States Court of Appeals, First Circuit

August 18, 2004

Heard April 9, 2004.

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[Copyrighted Material Omitted]

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Mortimer C. Newton, was on brief, for appellants.

John M. Armstrong, with whom Schnader Harrison Segal & Lewis LLP was on brief, for appellee.


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Circuit Judges, and SARIS, [*] District Judge.

TORRUELLA, Circuit Judge.

In 1977, Warren Picillo, Sr. and his wife agreed to allow part of their pig farm in Coventry, Rhode Island ("Picillo site") to be used as a disposal site for drummed and bulk waste. Later that year, after thousands of barrels of hazardous waste replaced what pigs at one time called home, a monstrous explosion ripped through the Picillo site. The towering flames, lasting several days, brought the waste site to the attention of the Rhode Island environmental authorities. Rhode Island investigators "discovered large trenches and pits filled with free-flowing, multi-colored, pungent liquid wastes." Violet v. Picillo, 648 F.Supp. 1283, 1286 (D.R.I.1986). Recognizing the environmental disaster it had discovered, Rhode Island closed the pig farm and, with the federal government, began the cleanup process.

In a nutshell, this case involves an action under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") §§ 101-405, as amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), 42 U.S.C. §§ 9601-9675, brought by a company whose hazardous waste was deposited at the Picillo site against a group of people who were involved with the site.

I. Background


CERCLA is a statutory scheme that provides specific procedures for the remediation of a hazardous site. To understand this appeal, it is necessary to mention some of these procedures and define certain terms.

The remediation process at a hazardous site is called a response action. 42 U.S.C. § 9601(25). A response action involves removal actions, which "means the cleanup or removal of released hazardous substances from the environment," id. § 9601(23), and remedial actions, which "means those actions consistent with permanent remedy taken instead of or in addition to removal actions in the event of a release or threatened release of a hazardous substance into the environment," id. § 9601(24).

When the government performs a response action, it can bring "a cost recovery action under § 9607 ... for the costs of the cleanup [against] a party found to be an owner or operator, past operator, transporter, or arranger." United States v. Davis, 261 F.3d 1, 28-29 (1st Cir. 2001). "A party found liable under § 9607 may in turn bring an action for contribution" against potentially responsible parties ("PRPs") 1 under § 9613(f). Id. at 29.

B. The parties

Defendants-appellants, Daniel Capuano, Jr.; Jack Capuano; United Sanitation, Inc.; A. Capuano Brothers, Inc.; and Capuano Enterprises, Inc. (hereinafter referred to as "the Capuanos"), were in the business of hauling hazardous waste. Jack Capuano was the president and sole shareholder of Sanitary Landfill, Inc., a landfill operation located in Cranston, Rhode Island. Jack Capuano and Daniel Capuano jointly owned United Sanitation, Inc., a

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waste hauling company. Jack Capuano was the president of United Sanitation and Daniel was the vice-president. In 1977, the Capuanos reached an agreement with Warren Picillo to dump hazardous waste on his pig farm.

In 1977, plaintiff-appellee, Rohm & Haas Company ("R & H") operated research facilities in Spring House and Bristol, Pennsylvania, which generated hazardous waste. Forty-nine of the 10,000 drums of waste at Picillo were generated by R & H. O'Neil v. Picillo, 682 F.Supp. 706, 709, 720 (D.R.I.1988).

These drums ended up at the Picillo site in a round-about way. R & H's Spring House facility contracted with Jonas Waste Removal ("Jonas") to dispose of its waste. Jonas sent the waste to the Chemical Control Corporation, which later contracted with Chemical Waste Removal to dispose of the waste. Chemical Waste Removal disposed of the waste at the Picillo site. R & H's Bristol facility contracted with Scientific Chemical Processing ("SCP") to dispose of its waste. SCP later contracted with Daniel Capuano and United Sanitation to dispose of the waste at the Picillo site.

C. The soil cleanup

In 1983, Rhode Island brought an enforcement action under CERCLA § 107, 42 U.S.C. § 9607, for cleanup costs at the Picillo site. This initial action was brought against 35 defendants "who were either owner/operators of the site, parties who allegedly transported waste there, parties alleged to have arranged for their waste to be transported to the site, and parties alleged to have produced waste deposited at the site." O'Neil, 682 F.Supp. at 709.

Rhode Island settled with twenty of the defendants, including the Capuanos. The Capuanos agreed to pay $500,000. Rhode Island went to trial against five of the remaining defendants, including R & H. After trial, the district court found R & H and two other companies jointly and severally liable for un-reimbursed past response costs of $991,937 and for "all future costs of removal or remedial action incurred by the state ... includ[ing] any costs associated with the removal of contaminated soil piles." Id. at 731. We affirmed the district court's holdings. O'Neil v. Picillo, 883 F.2d 176 (1st Cir. 1989).

The United States also sought reimbursement for its response costs associated with the soil cleanup at the Picillo site and settled with many parties, including the Capuanos. The Capuanos agreed to pay $1,500,000. The settling parties received contribution protection as part of the settlement agreement. See 42 U.S.C. § 9613(f) (2) ("A person who has resolved its liability to the United States or a State in an administrative or judicially approved settlement shall not be liable for claims for contribution regarding matters addressed in the settlement."). In 1989, the United States filed a cost recovery action under § 9607 against R & H and another company, American Cyanamid. See United States v. American Cyanamid Co., 794 F.Supp. 61 (D.R.I.1990). The district court entered a judgment against them for $3,339,029 plus interest. United States v. American Cyanamid Co., 786 F.Supp. 152, 165 (D.R.I.1992).

D. Groundwater cleanup

In 1987, the United States began developing a Remedial Investigation and Feasibility Study ("RI/FS") with respect to the groundwater at the Picillo site. By September 1993, the United States called for a groundwater cleanup. On March 30, 1994, the United States issued a "special notice letter" to twenty PRPs, including the Capuanos and R & H, demanding they implement a groundwater remedy and reimburse

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the Environmental Protection Agency ("EPA") for the costs related to the RI/FS and enforcement costs. In response to the United States's letter, two groups of PRPs made settlement offers. The Capuanos joined neither group. R & H joined one of the groups making a settlement offer. As a result, R & H began incurring cleanup costs in late 1994. R & H was expelled from the settlement group, however, in March 1995 because it could not agree with the group regarding R & H's contribution. Without R & H, a group of PRPs settled with the United States and agreed to implement a groundwater remedy.

In 1998, R & H entered a consent decree with the United States to pay $4,350,000 to compensate the United States for direct response costs related to groundwater cleanup, plus $110,000 towards oversight costs, and $69,000 towards natural resource damage. The consent decree was approved in October 1998.

E. R & H's contribution action

In April 1995, R & H instituted a § 9613(f) (1) contribution action in the United States District Court for the District of New Jersey to recover past and future response costs related to groundwater cleanup. The suit named 52 PRPs, including the Capuanos. In March 1999, the Capuanos moved to dismiss R & H's claims against them based on personal jurisdiction and venue grounds. The District Court of New Jersey concluded it lacked jurisdiction over the Capuanos. Thus, the District Court of New Jersey severed the claims against the Capuanos and transferred them to the District Court of Rhode Island.

F. The proceedings below

In 2001, the Capuanos filed a motion for summary judgment, which was denied. In March 2003, the matter was tried before a district judge who found the Capuanos liable to R & H and entered judgment for $2,651,838. In September 2003, the district court amended the judgment to include $507,369 for prejudgment interest. The Capuanos appeal from this amended judgment and for the reasons stated below, we affirm.

For ease of discussion, this opinion is organized into three parts. Part One addresses the affirmative defenses raised by the Capuanos--statute of limitations, res judicata, and contribution immunity. Part Two addresses issues relating to the trial. Part Three addresses issues relating to the judgment and the awarding of prejudgment interest.

II. Part One: Affirmative defenses

A. Statute of limitations

CERCLA mandates that:

No action for contribution for any response costs or damages may be commenced more than 3 years after--

(A) the date of judgment in any action under this Act for recovery of such costs or damages, or

(B) the date of an administrative order under section 122(g) [42 USCS § 9622(g)] (relating to de minimis settlements) or...

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